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In the Spotlight: Talking With Big Yellow Self Storage

With nearly 70 facilities across the United Kingdom and Paris, Big Yellow Self Storage is one of the largest self-storage operators in Europe. Inside Self-Storage spoke with several of the company’s executives earlier this fall to discuss how Big Yellow has fared during the global downturn, its new commitment to the environment, and its plans for future growth. Included in the interview were Paul Donnelly, corporate social responsibility manager; Adrian Lee, operations director; Sharon McCarthy, marketing executive; John Trotman, chief financial officer; and Rob Strahan, head of sales and marketing.

1. Tell us a bit about Big Yellow.

McCarthy: We combine the latest technology with excellent customer service and a network of 68 stores in high-profile, easy-to-access, main-road locations. We’re already the leading self-storage brand in London and the South of England, and we’re now expanding to cover the rest of Britain.

Our stores offer sophisticated 24-hour security, including a personal access-code system that allows tenants into our buildings seven days a week, 365 days a year. The system ensures tenants have total control over who enters a storage room.

Our focus on the location and visibility of our buildings, coupled with excellent customer service, has helped to create one of the most recognized brand names in the storage industry.

2. Big Yellow recently committed to corporate social responsibility (CSR). What does this entail?

Donnelly: As a developer and operator of self-storage, Big Yellow sees CSR as a belief that we should take into account the social and environmental impacts of our operation on our stakeholders. CSR policy at our business level entails a vision to “strike the balance” between socio-environmental responsibilities and commercial objectives.

CSR also entails raising the awareness of our domestic customers on space for lifetime events, such as getting married, having children, de-cluttering and moving. Our business customers need to know how we can facilitate continued business growth and regeneration without the expense of relocation from established premises. This can be achieved through our storage building flex-offices, retail and other types of workspace.

From an environmental perspective, our store operation and construction-energy uses have been identified as our most significant impact. This has resulted in our building portfolio evolving from recycled or refurbished buildings to purpose-built, high-quality and well-insulated stores.

These buildings do not require heating and cooling in 97 percent of their areas. More than 20 percent of our portfolio has energy-efficient design, lighting and lifts. Onsite renewable-energy generation through solar photovoltaic panels, wind turbines and ground-source heat pumps reduces energy grid supply and carbon emissions by a further 10 percent to 20 percent. Several green walls, roofs, landscape gardens and rainwater harvesting systems in new stores contribute locally to mitigate the effects of the urban heat-island effect and climate change.

Big Yellow’s environmental investments have already resulted in cumulative long-term financial benefits, and reduced energy use by 11 percent in 2009. By 2010, we will be complying with the Climate Change Act, Carbon Reduction Commitment and benefitting financially from carbon trading. Also by 2010, our renewable energy installations will start to earn an additional income stream from the Energy Act (Feed-in Tariff).

Big Yellow will gain a new brand loyalty through a long-term, low-risk, compliant and ethical image. This image will include being eco-efficient, progressive and potentially innovative. The emerging “green” technology markets and consumers will increase profitability and eventually shareholder value.

3. How has Big Yellow been affected by the downturn in the world economy?

Trotman: Big Yellow’s performance has been relatively resilient, but not immune, to the effects of the global recession. Same-store occupancy has fallen; however, the effect on revenue has been in part offset by the ability to manage yield through customer price increases, and effective controlling of price and promotions to new customers.

New store openings have performed well, particularly in London, and have shown good occupancy growth. In recent months, we have seen a noticeable improvement in activity levels across the group, although these are below those experienced prior to the onset of the credit crunch in August 2007. This is consistent with the increased activity within the housing market in recent months.

Self-storage has proved resilient due to the many different users and usages of the product. For example, during 2008, Big Yellow saw an increase in customers from the rental sector, caused by the dislocation in the owner-occupied sector, driving storage requirements from people who were, for example, unable to upsize, or who had sold their houses and renting until the market reached its bottom.

Our customer base is 20 percent businesses (occupying 25 percent to 30 percent of the space). This sector has performed well during the downturn, as the flexible nature of storage appeals to businesses who do not want to be burdened with long leases on typical warehousing space.

4. Tell us about the new Big Yellow blog. What can Web users find?

Strachan: The blog aims to be a useful resource for anyone looking for personal or self-storage solutions, with handy hints and tips and tricks on packing, storing and transporting. The blog will also carry company news from our stores about our countrywide and local initiatives. Alongside these are occasional feature articles on initiatives from within the company and the world of self-storage.

Every week, we bring our readers “Did you know” facts about self-storage, and we hope it will be a useful resource for our customers. All of our social-media presences are featured in our very own social-media hub, so the public can interact with us informally via Twitter, Facebook, YouTube or Flickr. We’re due to launch a wine-blog offshoot very soon to highlight some of the great knowledge the team at our wine-storage facility, our flagship Fulham store, has at their disposal.

5. What’s the future for the company?

Lee: The future of Big Yellow will be driven by the potential to lease up the existing 58 stores that are currently trading as Big Yellow Self Storage. These stores offer another 1.8 million square feet to lease up. It will also be driven by continued acquisition of new sites and development of new stores. As of June 2009, the group had 12 sites under development, totaling another 0.8 million square feet of self-storage. New business development through the expansion of international franchise partners and expansion of the Armadillo managed store platform in the United Kingdom is also part of our future.